Major Hedge Funds Invest in Obscure Oil Company

May 24, 2021 James Heinsman Hedge Fund News

With energy prices on the rise, numerous large hedge funds are rallying to bolster Norwegian Energy Company (Noreco), a struggling North Sea oil and gas company based in Denmark. The hedge funds, which include Taconic Capital, CQS, Caius Capital, Astaris Capital, York Capital and Kite Lake Capital, have built positions in the company whose shares recently collapsed following a pre-crisis high.

According to the Financial Times, “Noreco was once Norway’s second-biggest oil and gas company by production, but was hit by the slump in the oil price during the financial crisis. The firm has also suffered after cracks were found in one of its oil platforms in 2009.

In 2018, it lost the court case for some $470m it had brought against 20 insurance companies it hoped would pay out over the cracks.  But later that year Taconic, Kite Lake, CQS and York helped fund Noreco’s purchase of Shell’s Danish upstream assets, making it the second-biggest oil and gas producer in Denmark.”

Taconic’s Peter Coleman and Kite Lake’s Jan Lernout were both voted on to the board last week, and hedge funds are hoping that production will be doubled by the second half of 2023.

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